Is Extreme Art Studio a third-party beneficiary of the franchisee's nondisclosure and non-competition agreements?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
This System Protection Agreement ("Agreement") is entered into by the undersigned ("you" or "your") in favor of Extreme Art Studio Franchising, LLC, a Minnesota limited liability company, and its successors and assigns ("us", "we" or "our"), upon the terms and conditions set forth in this Agreement.
No other party shall be a third-party beneficiary to this Release.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 40–41)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the franchisor, Extreme Art Studio Franchising, LLC, is a direct beneficiary of the System Protection Agreement. This agreement outlines the terms of non-disclosure and non-competition that apply to individuals associated with the franchisee, such as managers or officers.
Specifically, the System Protection Agreement is entered into "in favor of Extreme Art Studio Franchising, LLC, a Minnesota limited liability company, and its successors and assigns." This means that Extreme Art Studio has the right to enforce the terms of the agreement directly against individuals who violate it. These terms include restrictions on involvement with competitive businesses and the protection of confidential information and intellectual property.
However, regarding a general release agreement, the FDD states, "No other party shall be a third-party beneficiary to this Release." This indicates that while Extreme Art Studio benefits directly from the System Protection Agreement related to non-disclosure and non-competition, it is explicitly excluded from being a third-party beneficiary in the context of a general release agreement.